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The big banks dragged for a second day as Aussie shares extended yesterday’s retreat.

The S&P/ASX 200 eased 33 points or 0.6 per cent to 5352, but was roughly 2 ahead for the week thanks to solid gains on Monday and Tuesday.

Today’s weakness followed a late slump on Wall Street as gains in “stay at home” stocks were outweighed by declines in companies more exposed to coronavirus lockdown restrictions. The S&P 500 fell 20 points or 0.7 per cent, even as the tech-heavy Nasdaq gained 45 points or 0.5 per cent. S&P 500 index futures rebounded this morning, lately up ten points or 0.4 per cent.

The financial sector successfully navigated a slew of profit downgrades and suspended dividends last week, but has struggled to break out of a month-long trading range. The sector slipped 1.1 per cent this morning as CBA and Westpac shed 1.2 per cent, ANZ 1.3 per cent and NAB 1.8 per cent.

Energy stocks have weathered extreme ructions in oil markets with minimal damage, but this morning eased 1 per cent. Cooper Energy retreated 3.8 per cent, Santos 2.7 per cent and Woodside 1.7 per cent. Industrials were also weak as Brambles dropped 1.8 per cent, Transurban 1.3 per cent and Aurizon 0.8 per cent.

Much of the green on trading screens came from tech and traditional defensive sectors. Polynovo climbed 4.6 per cent, Estia Health 2.6 per cent, Xero 2.6 per cent, and Avita Medical 2.9 per. Spark Infrastructure put on 2.8 per cent after reaffirming dividend guidance. Goodman Group rallied 3.4 per cent on news it expects to meet its full-year guidance and dividend prediction. CSL was unchanged  0.4 per cent after raising US$750 million through a private placement to US investors.

The resources sector led a mid-morning revival as a 1.6 per cent rise in BHP and 1.3 per cent gain in Fortescue outweighed a decline of 0.7 per cent in Rio Tinto. Newcrest was another drag, falling 2.6 per cent.

March figures showed a huge increase in the trade balance to a record surplus of $10.6 billion as imports slumped a seasonally-adjusted four per cent due to problems in the supply chain. Exports jumped 15 per cent amid robust demand for iron ore and coal.   

China’s economic recovery since virus lockdowns were lifted appears to be going slower than expected, according to a measure of services sector activity. Caixin’s services gauge improved much less than economists expected, edging up to 44.4 from a March reading of 43. Readings below 50 indicate contracting activity. The consensus among economists was that the sector would grow last month following two months of contraction.

A downbeat morning on Asian markets saw China’s Shanghai Composite ease 0.3 per cent, Hong Kong’s Hang Seng 0.5 per cent and Japan’s Nikkei 0.2 per cent.

Oil and gold rebounded this morning from overnight weakness. Brent crude improved 12 cents or 0.4 per cent to $US29.84 a barrel. Gold rose $6.50 or 0.4 per cent to $US1,695 an ounce.

The dollar edged up 0.1 per cent to 64.09 US cents.

What’s hot today and what’s not:

Hot today: Impact Minerals (ASX:IPT) soared to its highest level in more than two years after new essays from previously-drilled holes indicated high grades of rare elements at its Red Hill prospect near Broken Hill. Drill holes previously assayed for platinum, palladium and gold returned high grades of the rarer rhodium, iridium, osmium and ruthenium, some of which are currently fetching near-record prices. The rare elements are used in electronics, metal alloys and catalytic converters. The share price touched 2.2 cents, a level last seen in November 2017, before easing to 1.7 cents, a gain of 88.9 per cent.

Not today: Mortgage insurer Gemworth (ASX:GMA) slumped after warning it expects a flood of souring loans as unemployment soars and the property market hits the rocks. The company wrote down $181.8 million for bad debts and deferred a decision on whether to pay an interim dividend. CEO Pauline Blight-Johnston said the company was in a strong capital position and would withstand any volatility in claims. Shares in the insurer dipped 5.3 per cent.  

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